IFS Minutes – October 5 and 6, 2001 (Corvallis)

Present: Elizabeth Boretz (EOU), Duncan Carter (PSU), Bill Danley (SOU), Elaine Deutschman (OIT), Peter Gilkey (UO), Marye Hefty (OIT), Jim Isenberg (UO), Jeff Johnson (EWU), Kirsten Lampe (OHSU), Mary Anne Linden (WOU), Jim Lundy (OSU), Bruce Sorte (OSU), Gary Tiedeman (OSU), Bob Turner (WOU), Craig Wollner (PSU),

Gordon Dodds, Professor Emeritus of History at Portland State University, Overview of Oregon Political Culture

Dr. Dodds began by asking: How can we make a bigger impact of Oregon Citizens to value higher education? He provided the following historical perspective to answer his question.

Oregon history can be divided into three eras: 1) the Oregon Trail—from 1840-1869, 2) the progressive era—from the late 19th century to the early 20th century, and 3) the environmental legislation era— from the mid-1960s to the mid-1970s.

The Oregon Trail era (1840-1869) is identified by the mass migration of people from the Midwest and other areas to Oregon. These people came to “escape an existing [bad] condition.”

The progressive era (late 19th to 20th century) is identified by the belief that people are fundamentally good. It was a time of optimism, and “people were not deterred by social problems.” In this era, Oregon was an agricultural state.

The first major industry/corporation in Oregon was the Southern Pacific Railroad. This industry came under fire by businessmen complaining of no service and by farmers complaining about their grain not being shipped on time. Also during this time, some people displayed a fear of the new emigrant. And another complaint was that the Oregon constitution was too restrictive.

As a result of these complaints, the people decided to change the political structure of the state. In 1902 the initiative and referendum were introduced. These devices have become known as the “Oregon System.” After 1902, some public officials were recalled.

Between 1902 and 1912, progress was seen in some areas but not others. For example, the voters placed taxes on utilities and Oregon beaches became public. The voters refused to issue road bonds and the tax base is defeated for the University of Oregon and for Oregon State University.

In summary, during the progressive era the citizens want “cheap progressivism,” which is progress that does not require much sacrifice.

The environmental legislation era (from the mid-1960s to mid-1970s) is marked by a nation-wide concern for the natural environment in Oregon and by a great population movement into the State. This was a time of great prosperity for the state.

During this time, Tom McCall worked with the citizens of Oregon to clean up the pollution in the Willamette River.

The push during this time was toward making government more efficient. The people believed in restructuring government.

Legislation that passed included the 1969 statewide zoning law (the first in the nation), the 1971 bottle bill, and the 1969 ban on field burning (which was later modified). Legislation that did not pass included the 1969 and 1985 sales tax initiatives and the 1971 income tax rise to benefit schools.

Finally, Oregon today—a snapshot

Annual spending in Oregon for higher education is $292.50 per person. Annual spending in Oregon for prisons is $510.30 per person.

From 1980 to 2000, higher education spending increased 21%. During the same time, prison spending increased 282%.

The Chronicle of Higher Education ranked the library research holdings of major Universities. The University of Oregon made the list at a ranking of 80th. The University of Oregon also made the list for endowments at 168th.

In the year 2000, Oregon earned an affordability rating of D-. Oregon also earned the ranking as the 5th least affordable state for higher education.

In Oregon, 75% of 18 to 24 year olds have a high school certificate. This is the lowest in the nation.

Forty-four states among 50 spend more per capita than Oregon on higher education.

In Oregon, from 1989 to 1999, the income gap widened faster than any other state but Rhode Island.

What can we learn from the past? The following are Dr. Dodds’ insights:

For most Oregonians, we have not made changes that require very many sacrifices. We believe in cheap progressivism. As a state, we are “skating by.” We are happy to be in the middle

We will not become another Silicon Valley unless the state has a dramatic change of heart.

To directly quote Dr. Dodds, “I can’t think of an argument or an appeal to get people to support higher education suddenly [in Oregon] when they have never done so.”

Grattan Kerans, Assessment of Higher Education’s 2001 Legislative Session

Mr. Kerans explained that we have been in a recovery mode since the measures of 1991 and 1993.

Joe Cox brought a change in attitude. He let the legislature know, “You will get these things for your investments.”

In 1997, we began to turn around. In 1999, we saw a $150M increase in our budget.

For this biennium, we had $79M in the general fund above the total legislatively approved budget, which is a 10.6% increase in the general fund for this biennium. So, the legislature and governor made significant progress.

In this most recent budget, we had a loss. On the upside, we made up for some of this loss with the $44M for targeted programs, the $8.5M for new enrollment, and the $7.2M for the new campus.

On the downside, the general fund contribution to the cell values in the previous biennium was 87.9%, and this biennium it is 83.6, which is a 9% state reduction to the cell values. Stated another way, there was a $37M reduction in the general fund support for the continuing service level of the cell values for the current enrollment.

How was this shortfall made up? Students made up the bulk with a $25M tuition increase. Taking enrollment recovery and covering the current enrollment made up another $8.5M.

All of this recovery still left us $4 to 5M short in meeting the current service level of the current enrollment. So, we started this biennium with a small but measurable step back.

Yes, we got a D- in access from “Measuring Up 2000,” but our recent tuition increase comes after 5 years of no increases.

The bottom line is that we have made significant progress recovering from Measure 5.

The immediate future involves a special session that the governor has called for January to look at cuts in Oregon to help balance the budget. This special session may not be our last one this year. The governor needs to cut about 2%, but he is against across the board cuts.

So, what do we need to look at? At this point, Grattan Kerans asked the following rhetorical questions: Is the OUS budget discretionary or basic? Is it a cost budget or an investment? Is this social, civic, or economic development that we generate? Do we want to be okay or excellent in higher education? Is our budget part of a block? Are we fundamental or are we scalable?

He answered these questions by stating the following. In terms of the 1995, 1997, 1999, and 2001 budgets, we are a cost. We represent a service. Adequate is good enough. We are not fundamental, and we are not part of the block.

On the positive side, we share our bad condition with all of other state appropriations expect prisons and the Oregon Health Plan.

Grattan Kerans had the following advice for the immediate term:

“Fund the enrollment. Keep our part of the model.” Achieve the Oregon University system goal.

“Invest in capital renewal, so the education experience that students have is excellent.” Right now we have a crises in capital because almost 20% of our current capital investment is in the deferred maintenance plan. This is a crisis the board will be looking at.

Representative Phil Barnhart (Democrat—Eugene)

Mr. Barnhart stated that the state is short funding $1 to 2.5 billion each biennium, and we don’t have what we need to fund the state budget at any appropriate level.

He explained that the voters in Oregon don’t understand the dire funding problems in Oregon. Higher education is simply a microcosm of what other programs in this state face.

Forty-five percent of Oregon citizens don’t know we are in a deficit. The legislature has done us a disservice by pretending that manipulation of the budget will fix this deficit problem. Senior legislators are in denial about the budget situation.

The solutions? We need a frank conversation in Oregon about our revenue base and what we as Oregonians want.

We also need a fundamental shift that will require long-term work on the part of lots of citizens.

Representative Kelly Wirth (Democrat—Corvallis)

Ms. Wirth began by telling us that she wanted to speak about this legislative session and her impressions about what went wrong.

She explained that higher education wasted time by telling the legislature the benefits of higher education. The legislators know the benefits.

The fundamental failure is that people do not realize that we didn’t fully fund the RAM because people don’t understand the RAM. The RAM works in a booming economy. In other economies, the model needs flexible money.

What are the most important things we can do?

Give legislators an honest view of what a 2% cut will mean.

Also, explain the RAM.

In the special session, all the talk is about cutting budgets, and the talk should be about how to increase budgets. We need a conversation in this state about adequately funding this state.

Jim Lussier, Higher Education State Board Member

Dr. Lussier explained that right now we have way more need than money. We can’t just ask for incremental increases. So, how do we get there?

In the short term, the special session will help.

In the long term, we need to determine what we are about and how to get there. We are at a survival level.

He explained that we make the mistake of planning with the money we have and not planning with what is needed to make us successful. This is not how business works (planning for success)..

People in general understand the need for higher education, but they also have some negative perceptions. So, we have to make a much stronger case for higher educat ion.

One potential revenue source for higher education is continuing education for companies. Right now business spends billions on this continuing education.

Also, we need to look at private/public partnerships.

Diane Vines (Vice Chancellor)

Ms. Vines stressed that the most important thing is the general public doesn’t understand enough about us. There is a lack of knowledge about public universities.

She explained we need a strategic communications plan for higher education to talk about the benefits to society and the economy.

We are lucky if 10% of the population in Oregon can name four public higher education institutions.

Thirty-four percent of those surveyed in a recent phone interview think we are doing better than 5 years ago. Eighty-six percent want us to compete to be the very best (and we can capitalize on this).

She stressed that we are now in a knowledge economy. We have not shown well the role we play in this economic development. We need a well-educated citizenry.

We need to make the case to the people who can then tell their legislators. We need to get the message out about the importance of higher education in this state.

The board is also looking at new models for funding higher education. One model is public corporation status.

Kelly Wirth added that the community colleges did a great job in visiting legislators. They had a plan and they had one message. They knew their vital role in this state.

Some Key Points in the Resulting Group Discussion

Bruce Sorte—Social services in the 1980s were hammered, and they learned to repackage their message to be successful. We need to sell ourselves and tell our stories.

Public education is becoming a private benefit. Tuition needs to go up to charge people who get this benefit.

Diane Vines—People lack knowledge about us. They want us to be the best, so we need a coordinated message.

They want their kids to stay in Oregon. The jobs are not here if you are not educated.

Grattan Kerans—The board is looking at the public corporation issue. We can either have what we have now with incremental change or we can come up with a new model.

Duncan Carter—Our fiscal relationship to the state won’t improve. Our plan must respond to reality. We need to look at grants, gifts, and self-support courses.

Kelly Wirth—Call us legislators on our tax credits. Hold us accountable.

Bruce Sorte—Could we compete as a corporation?

Grattan Kerans—We could offer a general obligation bond to the state.

This is no longer a public obligation. It is a private benefit. Remember our D- in access. During the last 20 years, we have shifted from the state picking up three to one of the cost of education to today where we are partners sharing equally in the cost.

Phil Barnhart—We need to be very careful with this public obligation/private benefit issue. What makes a society rich or poor? One reason we have a rich society is because of advanced education.

Jim Lussier—We have not come together as schools. We are seven separate schools. We need to transform the system.

Craig Wollner—We are at a transition point in higher education. What is a university? We need to figure this out in relationship to the population we serve. We need to create a new vision of the university.

Elaine Deutschman—Do we need to look a restructuring the board?

Diane Vines—The board priorities are 1) program review and program approval, 2) economy, and 3) linkages to K-12 and community colleges.

Kirsten Lampe —The OSHU system is making an 8% cut. We are making difficult decisions about programs to keep and to lose.

Jim Lussier—We have a huge shortage nationwide of nurses, but OSHU is making cuts.

Bob Turner—It would be a huge mistake to eliminate regional universities. I am hearing an emphasis on training here and not education.

Group Discussion about Solutions

Kelly Wirth—Bring legislator to campus. Show successes, but more importantly, show the problems. Also, force republicans to look at measure 11 (mandatory sentencing) because this is a huge cost to the state. Make your case with personal contact.

Phil Barnhart– Work with your foundations. Find out which alumni are living in which districts and get these alumni to legislators

Diane Vines—You need to get the legislator when he/she is still a candidate.

Kelly Wirth—Higher education is important but we need more money. The problem is seniors, K-12, and higher education.

Phil Barnhart—The community college model works, which is training for a job.

Kelly Wirth—We need to emphasize that higher education is an essential service.

Kelly Wirth—It is very difficult getting real budget numbers from schools. We have no idea how things are really going in higher education and we don’t understand the RAM.

Bruce Sorte—An action can be a publicity campaign. We have $20K. We need to know opportunities relate to risk.